GCC consumers increasingly ‘gadget weary’

After serving Al-Futtaim’s Engineering and Technologies Division as group director of electronics, Vishesh Bhatia returned to Jumbo Electronics Company Ltd to take the helm.

He had occupied the role of COO in the early noughties and he is now approaching three decades within electronics distribution. In 2012 he won the ‘Indian CEO of the year’ award.

Stars of the small screen

Worldwide, PC sales are being annihilated by the soaring sales of smartphones and tablets. IDC predicts more tablets will ship than desktops or laptops combined in Q4 of this year. Overall, more PCs will have been sold in 2013, but the trend indicates a shift towards mobile technology. Bhatia, however, is noticing something different happening in the GCC region.

He says: “Yes, notebooks have declined, but desktop sales have actually increased for us. Manufacturers have been very innovative and I’m not talking about those clunky looking boxes, but very elegant machines that do more than simply give you a big screen. We find there’s definitely a market for customers who want these machines for personal or corporate use.”

The keyword here for Jumbo is ‘corporate’. Jumbo has a very large distribution service, working with partners such as Sony, HP, Acer and others, and continues to grow its enterprise division.

“We do see more enquiries coming our way and the enterprise section is turning positively. We’ve been doing this for 40 years now and we ain’t going nowhere, so we can service our enterprise customers any way they wish,” says Bhatia.

Just last week, global consumer electronics firm, Simmtronics, inked a deal with Jumbo for tablet distribution in the GCC region. Rajesh Aiyar, head of Jumbo Electronics’ IT Division, says that the alliance with Simmtronics is a benefit to all users, “from the corporate exec to the serious gamer” and believes the deal will strengthen the chain’s leadership position.

Bhatia adds: “Overall this business is seeing growth between five and seven per cent, if we can rely on the numbers we get from various agencies. While we see digital cameras and feature phones decline, smartphones and tablets are really growing.”

Dress smart

The next major shift in portable technology is already looming. Samsung, Sony and Apple are currently touting their smartwatches, with a host of mid-tier competitors soon to follow suit, and Google has been teasing us with their Glass gadget for quite some time. But how does the experienced CEO think ‘wearables’ will fare?

“My own view is that this is the next evolution in technology. It’s the next step, but not the last step. For example, the Galaxy Gear and the Sony SmartWatch are innovative, but the next innovations may come sooner than we think. Foldable screens, for example, could be made wearable to allow for a five-inch display on your wrist – or the screen could be completely detachable,” says Bhatia.

“Or taking it even further, nano-devices could be injected into your body and monitor your every move. So I predict that wearable technology will be adopted and I think that it’s just one step in a much longer journey,” he adds.

Having seen trends come and go for three decades, the Jumbo boss is well placed as a techno-soothsayer, particularly when it comes to predicting the Gulf market in particular. Additionally, Gartner predicted last year that consumer IT spending in the Middle East region and Africa would reach $244 billion, with Saudi Arabia, Turkey and South Africa accounting for nearly 35 percent of the revenue.

The elephant in the room?

However, consumer confidence toward technology dropped to its lowest level since 2009, even through sentiment toward the economy remained stable overall, according to figures released last week by the Consumer Electronics Association. While Gulf countries still appear to have an appetite for the latest and greatest, how well does that reflect in current sales?

“I think we’ve seen in the past that every time a new device was launched, such as the recent BlackBerry Z10 and Sony’s new Xperia devices, consumers were very keen to buy quickly,” says Bhatia. “But, really we are noticing a slight customer exhaustion, if I may call it that. There’s another term, ‘gadget weary’, and at the end of the day, even the Android-based devices don’t differ that widely in their look and feel.

“Customers are becoming increasingly less likely to part with thousands of dirhams for a device that isn’t that different from its predecessors. Some will, but the pace at which this is happening may keep slowing down. That’s my own prediction and perhaps wearable technology may alter this trend,” he concludes.